What are the good option strategy for Low risk monthly income?

[JohnnyDoe]

25% Voo (USA)
25% Cac 40 index (france)
25% DAX (Germany)
25% BFX (Belgium)
25% Amsterdam index
This is passive income etf portfolio divided across USA + Europe

Do you understand the concept of correlation?

 

[uranium]

Do you understand the concept of correlation?

This is exactly what this portfolio is made for
To diversify across different countries

 

[JohnnyDoe]

This is exactly what this portfolio is made for

in your imagination
For example:

 

[uranium]

in your imagination
For example:


View attachment 5117

Why should I care about correlation
I suggested a diversified portfolio that brings passive income.
I would not bet on China, Brazil, India
Even though I know they are going to make alot of money
I'm more comfortable with the west.

 

[JohnnyDoe]

Why should I care about correlation

Because high correlation = high risk

I suggested a diversified portfolio

high correlation = not diversified

I'm more comfortable with the west.

good luck

 

[uranium]

Because high correlation = high risk

high correlation = not diversified


good luck

Do you think that all of them would fail?
USA + Europe
It is impossible!

Voo
In the last 30 Years, the Vanguard S&P 500 (VOO) ETF obtained a 9.95% compound annual return

Historical data of the CAC 40 index
The index returned an average annual return of 7.90% between February 1991 and April 2023.

Historical data of the DAX index
The index returned an average annual return of 4.58% between January 1999 and January 2023.

Historical data of the AEX index
The index returned an average annual return of 12.90% between March 2009 and April 2023.

Only Bel 20 (Belgium) I wad wrong about this one. Avoid it.

 

[backpacker]

25% Voo (USA)
25% Cac 40 index (france)
25% DAX (Germany)
25% BFX (Belgium)
25% Amsterdam index
This is passive income etf portfolio divided across USA + Europe

= 125%

 

[uranium]

= 125%

Take away BFX Belgium

 

[backpacker]

Take away BFX Belgium

@JohnnyDoe has a point.
Your portfolio is not diversified since all of these markets are highly intertwined.

I agree that developed market exposure is, if we go by the textbook, more risky. But current valuations do not justify that traditional point-of-view.
However, more important is to add some bonds (direct or through ETF/mutual fund, depending on the size of your portfolio).

Always note: Past performance is not indicative of future performance.

 

[uranium]

@JohnnyDoe has a point.
Your portfolio is not diversified since all of these markets are highly interwined.

I agree that developed market exposure is, if we go by the textbook, more risky. But current valuations do not justify that traditional point-of-view.
However, more important is to add some bonds (direct or through ETF/mutual fund, depending on the size of your portfolio).

Always note: Past performance is not indicative of future performance.

4 countries not diversified enough?
Do you think they could all collapse?
If you buy only Voo. It is enough.
USA rules and will keep ruling for the next 100 years. No one can change that.

 

[backpacker]

4 countries not diversified enough?

Indeed!
Aside from that, true diversification goes by asset class.

Do you think they could all collapse?

A slow but steady demise.

USA rules and will keep ruling for the next 100 years.

That's what all empires said and believed when they where's at the top.

No one can change that.

You seem to be very enthusiastic, which can easily lead to disappointment.

 

[uranium]

Indeed!
Aside from that, true diversification goes by asset class.

A slow but steady demise.

That's what all empires said and believed when they where's at the top.

You seem to be very enthusiastic, which can easily lead to disappointment.

Etf is simply investing in the whole economy of a country. You simply have to believe in the country you bet on.
I learned a very important rule in the world of finance;
if you want to understand the economy, you should first understanding politics.
I am not enthusiastic at all. I came here to present facts. But because you hate the west like many members here. That's why you disagree.
Brics will fail and disappoint you

 

[Mercury]

USA rules and will keep ruling for the next 100 years. No one can change that.

You don't need 100 years, do you?

Forecasts matter only related to your remaining life expectancy:
" Remaining life expectancy without physical limitations applies to the number of years one is expected to live without any limitations in hearing, vision or movement. Remaining life expectancy in good self-perceived health is an estimate of the number of years one can expect to live in good self-perceived health. "

Say you are in your 40s, the relevant question is: Will the US economy/growth significantly collapse compared to the other markets over the next 30 years? Most probably not.

 

[Zikki]

For the record, JEPI/JEPQ are not available on IBKR CE (Hungary) but are available to EU residents via Swissquote.

JEPI returned in 5 years less than VOO in one. Any reason to buy that I don't understand? (Open question, I see JEPI everywhere on the forum but don't get it)

 

[Larin]

JEPI returned in 5 years less than VOO in one. Any reason to buy that I don't understand? (Open question, I see JEPI everywhere on the forum but don't get it)

JEPI hasn't been around for 5 years. So not sure what you mean. Also look at the real returns of both (including dividents). Finally, it may not be worth investing until you understand the purpose of the fund. There is a jepi group on reddit that may be of interest.

 

[ZipZop]

4 countries not diversified enough?
Do you think they could all collapse?
If you buy only Voo. It is enough.
USA rules and will keep ruling for the next 100 years. No one can change that.

Wow.. I can only suggest you take one of the many (free) courses you can find on internet/YouTube about correlation.. so many (objectively)wrong things in your statements and you seems sure of yourself so I won't try to make you change your mind (but basically all reactions you received already are legit, your diversification is not a real diversification and makes your whole portfolio having a very risky profile), this process has to be done by yourself once you do your homeworks

 

[Jbb1]

I invest 50/50 in SCHD/SCHG, with better returns than VOO for the past 10 years and a smaller drawdown as well.

 

[Mercury]

I invest 50/50 in SCHD/SCHG, with better returns than VOO for the past 10 years and a smaller drawdown as well.

Not bad but you would have done better 50/50 SCHD/VGT, similar max drawdown but more total return.

 

[Jbb1]

Not bad but you would have done better 50/50 SCHD/VGT, similar max drawdown but more total return.

I prefer not to invest in only one sector, VGT is only tech companies.

 

[uranium]

I prefer not to invest in only one sector, VGT is only tech companies.

Agreed
I have been there before
This year QQQ which is tech etf made 40% return and has historically made more returns than VOO
But 20% of QQQ holdings are Apple and Microsoft which is too risky.
Therefore I would go for Voo because its holdings are diversified